Since Donald Trump shelved tariffs against most countries to ultimately declare war on only one – China – all bridges between the world’s two largest powers have been severed. Chinese exporters are assessing their varying exposure to the US market. They are seeking new outlets, and once they find them, it is likely that there will be no turning back.
However, for many, the reality of heavy losses is undeniable: With a 145% tariff, many American distributors have opted to suspend their orders from China. They are waiting to see if the commercial storm will pass. The shock is brutal for China’s export regions. Therefore, all major players in the country’s economy are mobilizing. After all, the rise of China’s industrial power is what is targeted, and everyone must rally behind the great national struggle.
The web giants are at the forefront: They are helping Chinese producers sell domestically what they can no longer offload in the US market. The e-commerce giant Alibaba has announced the creation of a task force: 10,000 sellers will add 100,000 more listings on its Taobao site. The Hangzhou-based group has every interest in appearing proactive: It was the target of a crackdown campaign from 2020. Therefore, it has since redoubled its demonstrations of political loyalty. Another major site, JD.com, has announced the launch of a 200 billion yuan (€24 billion) fund to buy more from Chinese producers.
National solidarity
One of its major competitors, Pinduoduo, has also stepped up. The group runs the slashed-price Temu site, very popular in Europe and the United States. The tens of thousands of independent sellers operating there will be hit hard by the removal, on May 2, of the de minimis exemption that allowed parcels valued at less than $800 to be delivered duty-free. Pinduoduo promises to invest 100 billion yuan over three years to help its sellers adapt.
Temu is also rebuilding its reputation, as it has been heavily criticized in China by its factories for imposing harsh conditions on them. At the end of July 2024, hundreds of owners of small textile workshops protested outside its headquarters to complain about penalties imposed by the company and the fact that when a customer complains about a product, they are refunded without having to return it.
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